There isn’t much scarier in your financial life than getting audited by the Internal Revenue Service. It’s a situation that hits just about one out of every one hundred Americans. Many wonder if they are next on the list. This process can take a lot out of you, as the government goes through all of the documentation you have to substantiate the claims on your form.
If you’re looking to avoid the hassle of getting audited, here are a few steps you can take to lower your chances of getting flagged by the IRS:
Don’t Fail To File
The worst thing you can do during tax season is to fail to file altogether. If your plan is not to submit a tax return, it will greatly increase your chances of being audited and/or heavily fined. That’s certainly not a great way to start the new tax year off.
Instead, opt to work with a professional to put together and submit the necessary paperwork for the IRS. Using someone to prepare your taxes takes the guesswork out and ensures everything will be submitted on time and according to government rules.
Remember The Details
Another way to greatly decrease your chances of getting audited is to double-check that all of your writing is neat, legible, and addresses what the IRS is asking. Forms that are difficult to read will likely warrant a second look, and attract specialized attention to your account.
Just as important as readability is making sure that your return is error-free. Crimes, like fraud, are a very real concern for the federal government, so it’s crucial you provide them with as accurate information as possible.
Don’t Omit Information
Did we mention that the IRS probably has all of your financial information anyway? It’s really quite hard to hide anything from the government. Even omitting information on your tax returns can easily be flagged.
How? Well, between the paperwork you are submitting to them, and what your employer has already sent over, your statement should be matching up pretty close to all of the other documentation that’s made it their way. Even if it seems like a trivial amount of money to report, go ahead and fill it out on your return anyway, as it would you could potentially be fined or punished for such a small transgression.
Following these three helpful tips should get you well on your way to a worry-free tax season. Sometimes, being selected for an audit is just the luck of the draw, but for those moments where you have some say in the situation, sticking to the steps above is the best way to cut down your chances.
If you would like to learn more about how we can help you and your business improve its accounting practices, reach out to our team. For more information on other accounting topics, check out our blog.